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All That Glitters: Tips For Buying Gold Coins

 -- Published: Friday, 21 February 2014 | Print  | Disqus 

By Paul Shaefer


Gold coins are all the rage these days. Bullion bars had their day, but investors quickly discovered that those bars were a little difficult to unload in a jam. First of all, bars that are completely sealed must usually be reassayed for purity when they're sold. Some dealers will even require assaying if the bar is vacuum sealed just to make sure that the metal wasn't cut with inferior metals prior to being sold. Coins tend not to have this problem because of the way they're made. But, before you rush out to stock up, make sure you follow these basic tips for buying.


Stick To Major Countries


It's not that any particular country is bad, if it's not a "major producer." But, consider this: at some point you may want to sell the coin. If you're thinking of putting the gold into an IRA in the U.S., use the American Eagle - the gold purity is guaranteed by the U.S. government, and you won't run into problems with the IRS.


South African Krugerrands are also very liquid, and a good buy. The Austrian Philharmonic, the Australian Kangaroo, and the Canadian Maple Leaf are all examples of good coins to get into. Their respective governments guarantee the purity, and they're also well-recognized by most investors.


The purity varies on coins depending on the issuing government. For example, the U.S. issues gold coins with a lower purity while Canada issues coins of a higher purity. But don't get too worked up over purity. The reason the U.S. government issues coins with a lower purity is to strengthen the overall "toughness" of the coin. Gold is a soft metal, so by mixing it with stronger metals, the coin becomes more durable. In a sense, you're trading purity for durability.


Likewise, higher purity coins are more fragile than lower purity coins, since they contain more of the soft metal. But, regardless of the country you buy them from, as long as you stick to major producers, you're going to be buying a good coin.


In fact, most of the Rosland Capital gold reviews you see online will mention all of these as good investments in as far as gold coins are concerned.


Compare Prices Amongst Dealers


Buying gold is very similar to buying anything else. You don't just walk into any old dealer and buy up his lot. You compare prices. Everyone is out there trying to make a profit. Your job is to pay the lowest price over spot. The dealer's objective is to get you to spend the most amount of money over spot - that way he makes more.


Some dealers won't charge a premium though, and these can be one of the best places to do business. But, watch out. Gold is one of those commodities that's been hyped to the sky. There are a lot of scammers out there. Stay away from places offering free storage on allocated gold and gold coins, as well as delayed delivery.


Don't Get Into Rarities


Collectors love rare coins, but they usually aren't buying gold as an investment. They're buying it because they want a collector's item. Rare coins require a lot more diligence and expertise when you buy them. You really have to be a collector, not an investor.


Two coins might look very similar, but they may have very different grades. What's the difference? Several thousand dollars, that's what. You may end up buying something for more than what it's actually worth. Likewise, you could get shorted in the sale.


If you are determined to venture into this area, do yourself a favor and hire a professional. Have it professionally graded and get a certificate of authenticity. Yes, it's going to be a big hassle, but this is all part of the process of buying rare coins.


Buy Common Sizes, Like 1 Oz


Don't go crazy with oddball coin sizes. Most countries sell coins in 1oz denominations. What about the smaller denominations? They're fine, but they also carry a premium. So, you'll end up spending more for your gold than you should - lessening the profit potential on each purchase.


Avoid Turkish coins altogether if you're new. These are the only coins on the market that aren't sold in 1oz denominations. Instead, they're sold by gram weight with both the raw or "brute" weight and the net or "pure gold" weight being a driving factor in the price.


Turkish coins are used extensively in Turkey as gifts for birthdays, military service, weddings, and pretty much any special occasion. But, while they're very liquid, they're a little more difficult to understand for a new investor.


Paul Shaefer has extensive experience in commodities trading. He enjoys sharing his insights into the precious metals industry through blogging.


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 -- Published: Friday, 21 February 2014 | E-Mail  | Print  | Source:

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